AN ACT

 1-1     relating to the funding of passenger rail service by the Texas

 1-2     Department of Transportation.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Subsection (b), Section 456.002, Transportation

 1-5     Code, is amended to read as follows:

 1-6           (b)  Each public transportation program provided by this

 1-7     chapter, except the passenger rail service assistance program under

 1-8     Subchapter D, is a matching grant program for public transportation

 1-9     projects.  Approval by the United States of a proposed public

1-10     transportation project means that the project is consistent with

1-11     the purposes of this chapter and with the continuing, cooperative,

1-12     and comprehensive regional transportation planning implemented in

1-13     accordance with the Federal Transit Act and the Federal-Aid Highway

1-14     Act.

1-15           SECTION 2.  Chapter 456, Transportation Code, is amended by

1-16     adding Subchapter D to read as follows:

1-17          SUBCHAPTER D.  PASSENGER RAIL SERVICE ASSISTANCE PROGRAM

1-18           Sec. 456.061.  DEFINITION.  In this subchapter, "eligible

1-19     corporation" means a corporation created under former Subchapter

1-20     III, Chapter 14, Title 45, United States Code (now 49 U.S.C.

1-21     Sections 24101 et seq. and 24301 et seq.).

1-22           Sec. 456.062.  LOANS TO CORPORATION.  (a)  Under the

1-23     authority of Section 52-a, Article III, Texas Constitution, and

 2-1     from funds appropriated from the general revenue fund for this

 2-2     purpose, the commission may loan money to an eligible corporation

 2-3     that provides rail passenger service in the state.

 2-4           (b)  Notwithstanding any other statutory restriction, the

 2-5     portion of the state highway fund not dedicated by the constitution

 2-6     is collateral for repayment of a loan made under this section.  The

 2-7     comptroller may transfer from that portion of the state highway

 2-8     fund to the general revenue fund the amount needed to repay any

 2-9     unpaid balance on the loan, including applicable interest, in

2-10     accordance with the loan agreement.

2-11           Sec. 456.063.  AGREEMENT.  The department, on behalf of the

2-12     commission and with the approval of the comptroller, shall enter

2-13     into an agreement, under terms and conditions the department

2-14     considers appropriate, with an eligible corporation for the

2-15     purposes of making a secured loan under this subchapter.  The

2-16     agreement must provide for collateralization and guaranties in a

2-17     form and amount determined by the comptroller and the commission to

2-18     be sufficient to repay to the state highway fund any money

2-19     transferred to the general revenue fund under Section 456.062(b).

2-20           Sec. 456.064.  LIMITATION OF FUNDING.  The commission may

2-21     only expend funds specifically appropriated by the legislature for

2-22     the purposes of this subchapter.

2-23           Sec. 456.065.  GUARANTEE FROM MUNICIPALITIES.  The

2-24     department, on behalf of the commission and with the approval of

2-25     the comptroller, shall secure an agreement or agreements with the

                                                               S.B. No. 1706

 3-1     municipalities served by an eligible corporation that receives

 3-2     assistance under this subchapter to further guarantee the repayment

 3-3     of half of any unpaid balance on a loan, including interest, made

 3-4     under this subchapter.

 3-5           SECTION 3.  The importance of this legislation and the

 3-6     crowded condition of the calendars in both houses create an

 3-7     emergency and an imperative public necessity that the

 3-8     constitutional rule requiring bills to be read on three several

 3-9     days in each house be suspended, and this rule is hereby suspended,

3-10     and that this Act take effect and be in force from and after its

3-11     passage, and it is so enacted.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 1706 passed the Senate on

         March 25, 1997, by the following vote:  Yeas 24, Nays 5; and that

         the Senate concurred in House amendment on May 12, 1997, by the

         following vote:  Yeas 30, Nays 0.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 1706 passed the House, with

         amendment, on May 9, 1997, by the following vote:  Yeas 112,

         Nays 30, one present not voting.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor